FVCBankcorp(US:FVCB)2024-05-14 18:39PART I — FINANCIAL INFORMATION Financial Statements Presents FVCBankcorp, Inc.'s unaudited consolidated financial statements for Q1 2024, including comparative data and accompanying notes Consolidated Statement of Condition Total assets slightly decreased to $2.18 billion, liabilities reduced to $1.96 billion, and stockholders' equity increased to $220.7 million as of March 31, 2024 Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $2,182,662 | $2,190,558 | ($7,896) | | Loans, net | $1,833,828 | $1,809,693 | $24,135 | | Securities available-for-sale | $166,797 | $171,595 | ($4,798) | | Bank owned life insurance | $9,011 | $56,823 | ($47,812) | | Total Liabilities | $1,962,001 | $1,973,441 | ($11,440) | | Total deposits | $1,857,265 | $1,845,292 | $11,973 | | Other borrowed funds | $57,000 | $85,000 | ($28,000) | | Total Stockholders' Equity | $220,661 | $217,117 | $3,544 | Consolidated Statements of Income Net income increased by 116% to $1.34 million in Q1 2024, driven by a swing in non-interest income despite a 9% decrease in net interest income Q1 2024 vs Q1 2023 Performance (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $12,792 | $14,014 | -8.7% | | Provision for credit losses | $0 | $242 | -100% | | Total non-interest income (loss) | $395 | ($4,627) | N/A | | Total noninterest expenses | $8,625 | $9,010 | -4.3% | | Net Income | $1,340 | $621 | +115.8% | | Earnings per share, diluted | $0.07 | $0.03 | +133.3% | Consolidated Statements of Comprehensive Income Total comprehensive income for Q1 2024 was $3.0 million, a decrease from Q1 2023, influenced by net income and other comprehensive income Comprehensive Income Breakdown (in thousands) | Component | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Income | $1,340 | $621 | | Other Comprehensive Income | $1,687 | $3,705 | | Total Comprehensive Income | $3,027 | $4,326 | Consolidated Statements of Cash Flows Operating activities provided $7.2 million in cash, investing activities $7.4 million, while financing activities used $15.7 million, resulting in a net cash decrease of $1.1 million Net Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $7,152 | $2,557 | | Net cash provided by (used in) investing activities | $7,400 | ($671) | | Net cash (used in) provided by financing activities | ($15,658) | $4,161 | | Net (decrease) increase in cash | ($1,106) | $6,047 | - The company received $47.8 million in cash from the surrender of bank-owned life insurance policies during Q1 202418 Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity increased to $220.7 million by March 31, 2024, driven by net income and positive other comprehensive income Changes in Stockholders' Equity (in thousands) | Description | Q1 2024 | | :--- | :--- | | Balance at December 31, 2023 | $217,117 | | Net income | $1,340 | | Other comprehensive income | $1,687 | | Common stock issuance & other | $504 | | Balance at March 31, 2024 | $220,661 | Notes to Unaudited Consolidated Financial Statements Provides detailed explanations of accounting policies and financial data, including significant events like the Q1 2024 surrender of BOLI policies - In Q1 2024, the company surrendered BOLI policies with a cash value of $48.0 million, incurring an additional statutory income tax expense of $1.6 million and tax penalties of $722 thousand31 - The company's investment in Atlantic Coast Mortgage, LLC (ACM) represents a 28.7% ownership interest and is accounted for using the equity method24 - Unrealized losses in the available-for-sale securities portfolio, totaling $36.1 million, are primarily attributed to interest rate increases rather than credit quality deterioration, with no allowance for credit losses recognized3749 - The allowance for credit losses on loans was $18.9 million as of March 31, 2024, with no provision for credit losses recorded during the quarter5478 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2024 financial performance and condition, highlighting increased net income, decreased net interest margin, stable asset quality, and the impact of BOLI policy surrender Results of Operations Net income increased to $1.3 million in Q1 2024, driven by lower noninterest expenses and the absence of prior year's securities loss, despite a compressed net interest margin Q1 Performance Summary (in thousands) | Metric | Q1 2024 | Q1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Net Income | $1,340 | $621 | +116% | | Net Interest Income | $12,792 | $14,014 | -9% | | Noninterest Income (Loss) | $395 | ($4,627) | N/A | | Noninterest Expense | $8,625 | $9,010 | -4% | - The net interest margin decreased to 2.47% in Q1 2024 from 2.60% in Q1 2023, primarily due to the cost of interest-bearing deposits increasing by 98 basis points193 - The surrender of BOLI policies in Q1 2024 resulted in a cash payout of $48.0 million but also incurred $1.6 million in income tax expense and $722 thousand in tax penalties175 - Noninterest expense decreased by 4.3%, mainly due to a $484 thousand reduction in salaries and benefits and a $105 thousand decrease in occupancy expense210211 Financial Condition Total assets remained stable at $2.18 billion, with net loans and deposits increasing by 1%, while asset quality remained strong and capital ratios exceeded 'well capitalized' standards - Total assets were $2.18 billion at March 31, 2024, a slight decrease of 0.4% from year-end 2023213 - Nonperforming loans were $3.0 million, or 0.14% of total assets, at March 31, 2024, compared to $1.8 million, or 0.08%, at December 31, 2023219224 - The commercial real estate (CRE) portfolio, including construction, totaled $1.24 billion, with office loans representing $121.3 million (7% of total loans) and retail loans representing $266.1 million (14% of total loans)225227 - Tangible book value per share increased to $11.90 at March 31, 2024, from $11.77 at December 31, 2023258266 Liquidity and Capital Resources The company maintains strong liquidity with $247.3 million in liquid assets and robust capital, with a total risk-based capital ratio of 14.05%, exceeding 'well capitalized' standards - The Bank's total risk-based capital ratio was 14.05% at March 31, 2024, exceeding the 10.50% minimum requirement to be considered well-capitalized (including the conservation buffer)264 - As of March 31, 2024, the estimated amount of total uninsured deposits (excluding collateralized deposits) was $566.5 million, representing 30.5% of total deposits249 - The company has access to secondary liquidity sources, including $130 million in FHLB secured borrowings and additional capacity at the FRB discount window272 Quantitative and Qualitative Disclosures About Market Risk This disclosure is not required for the registrant and no information is provided - The company has indicated that this disclosure is not required283 Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of the end of the reporting period284 - No material changes to internal controls over financial reporting occurred during the last fiscal quarter285 PART II — OTHER INFORMATION Legal Proceedings The company is not currently a party to any material legal proceedings, nor is management aware of any threatened proceedings - The company is not party to any material legal proceedings287 Risk Factors No material changes in risk factors were reported from those disclosed in the Annual Report on Form 10-K - No material changes to risk factors were reported since the last Annual Report on Form 10-K288 Unregistered Sales of Equity Securities and Use of Proceeds The Board of Directors renewed the share repurchase program for up to 1,300,000 shares, with no repurchases made during Q1 2024 - The Board of Directors renewed the share repurchase program, allowing for the purchase of up to 1,300,000 shares292 - No shares were purchased under the program during the first quarter of 2024289 Defaults Upon Senior Securities No defaults upon senior securities were reported - No defaults upon senior securities were reported290 Mine Safety Disclosures This item is not applicable to the company - This item is not applicable to the company290 Other Information No other information was reported, and no Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers - No other information was reported under this item291 Exhibits This section lists exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The report includes standard exhibits such as CEO/CFO certifications (31.1, 31.2, 32.1, 32.2) and XBRL financial data (101, 104)296